Is it revealing of how little the Republicans have to offer during these tough economic times that they have to distort economic statistic after economic statistic?
It might be useful, during an election campaign, if the Democrats called them on it.
Recently, a Republican informed me that Bush's employment record was better than Clinton's. Where could he get that idea?
Well, how about from the September 3rd Wall Street Journal ("Bush Has a Good Economic Record") and conservative economist Keith Marsden: "The U.S. unemployment rate averaged 4.7% from 2001-2007. This compares with a 5.2% average rate during President Clinton's term of office..."
Hey, Keith, buddy, let me show you how misleading averages can be (or maybe this is no accident). See, when Clinton took office in 1993, the unemployment rate was 7.3%. When he left office eight years later, it was 4.2%. Thus the rate could be the 5.2% that you describe.
When Bush took office, the rate was 4.2%. When you wrote your article it had grown to 5.7% (and is now 6.1%).
So, during Clinton's term in office, unemployment fell dramatically. During Bush it has risen dramatically. (How could it be otherwise when Clinton was creating 165,000 more jobs each month than Bush?) But averages don't tell you that, so it's a bit misleading to use them, right?
OK, Marsden isn't really a prominent conservative, and we all make mistakes. But on September 15th, two stars of conservative economics, Arthur Laffer and Stephen Moore, took to the Journal's editorial pages to defend the Republican economic record regarding the poor ("New Evidence on Taxes and Income").
You see, the after-tax income of the poor increased an inflation-adjusted 25%, from $12,500 to $16,000, over the past 25 years, which the authors think is "special". (If you're wondering, you won't learn how this compares to the income of other classes in this article.)
Fine. To the authors' credit, they detail the various factors that they pinpoint as the basis for the income increase. To their discredit, it includes the "earned income tax credit", a tax subsidy of up to $4,700 for low-income families (depending on the size of family and level of income) that has grown considerably over the past 25 years. From the data provided, we can't pinpoint exactly how much, given the range of family sizes and filings, but we know it's a significant portion of the increase--or the authors wouldn't have included it. .
Meanwhile, unmentioned in the article is that the minimum wage also increased during this time, from $3.35 to $5.15, an increase of nearly 60%. Now the Moore/Laffer stat is "inflation-adjusted" so we can't determine the precise impact of the tax credit and wage increases.
But we can determine this: it's not conservative economic policies that are critical to the poor; it's liberal tax and wage policy.
OK, but unemployment and poverty really aren't the economic statistics closest to a conservative economist's heart. Stock market appreciation is.
So, on September 12th, Donald Luskin, chief investment officer at Trend Macrolytics LLC., set out to analyze which political party has a better record at raising stock prices-again in the Journal.
Any bets as to what headline Mr. Luskin, who is also an advisor to John McCain's campaign, foresaw? Here's my bet:
Stock Market Grows Most Under Republican Presidents.
Except for one thing...it doesn't.
Mr. Luskin and The Journal didn't want the headline "Not Only Do Workers Do Better Under Democrats, So Do Investors", which is what they would have gotten from a straightforward study.
Luskin explains: "I've run the numbers myself. ...(T)he Democratic claims are true: Since 1948, the Standard & Poor's 500 total return (capital gains plus dividends) has averaged 15.6% when a Democrat was in the White House and only 11.1% when a Republican was in the White House."
"You get a similar result if you look at growth in real gross domestic product. Under Democratic presidents, the average since 1948 has been 4.2%. Under Republican presidents it has been only 2.8%."
I want to direct your attention to the ellipsis. That's mine. I deleted from that paragraph "Superficially at least". Mr. Luskin was probably discomfited by the fact that Dems had the better record, so the data manipulations needed to begin, er...I mean Luskin strove to get beyond "superficiality".
Now, not all manipulations are created equal. First, Luskin starts by declaring that John Kennedy was "an enthusiastic supply-side tax cutter". The Republicans are always quick to claim Kennedy as one of their own as he reduced the highest personal income tax rate from 91% to 70%. It never occurs to them that Kennedy may have thought that 70% was the correct tax rate on the rich. If Obama announced tomorrow that he was increasing the highest rates to 70%, would the Republicans consider this to be "Kennedyesque"?
In any case, Luskin engages in all kinds of maneuvers, some quite creative: Turn Richard Nixon into a Democrat (he imposed price controls) and the Republicans come out on top; turn Kennedy into a Republican along with free-trader Bill Clinton (notice, not "tax-raiser" Bill Clinton) and count George H.W. Bush and Nixon as Democrats and the Republicans win again; a Democratic President and a Republican Congress generate the best results of any option. (Hence the article's actual title: "Divided Government Is Best For Market".)
Gee, Luskin forgot: Republicans have a better record at ethics if Richard Nixon is considered a Democrat.
Even Luskin's conclusion is suspect given that there has been a Democratic President and a Republican only 6 of the 60 years that he examines.
But all of his endeavors miss the point. The Republicans hold themselves out as the party of the shareholders. Yet, Republicans don't manage the economy any better than the Democrats from an investor perspective-and much worse from a worker's (median income increased $6,000 under Clinton and has dropped $1,000 under Bush).
OK, Moore and Laffer and Luskin aren't big enough for you? How about Karl Rove, in (where else) the Wall Street Journal (October 2): "The Tax Foundation...found last year that 91% of Americans thought the maximum anyone should pay in taxes was 30% or less of their income. Mr. Obama wants to raise the top marginal rate by nearly a fifth to about 40%. (Bad Math Alert: Obama wants to raise the top marginal rate by 13%, closer to 10% than 20%). With Medicare taxes and his proposed increases in Social Security taxes on the wealthy added in, this would result in over 50 cents out of every additional $1 earned in the top income brackets going to government."
Rove is confusing nominal and effective tax rates. In fact, despite the 35% top nominal tax rate, those making over $5 million annually have actually paid less than 25% of their income in federal taxes recently. Meanwhile, Social Security taxes are capped and don't lead to any cents out of every additional $1 earned in the top income brackets going to government, depending upon any future changes. Looks like there's more room for Obama's tax increases than Rove admits (even assuming that 30 per cent is the right number).
Elections are opportunities for citizen education. Democrats should be educating the American people on Bush's unemployment record, what the rich are really paying in taxes, and the superior Democratic stock market record.
Is the economic crisis is so severe that the Democrats shouldn't take advantage of this opportunity? They don't conflict...
But if not, they should at least encourage the Wall Street Journal to hire a copy editor.